The political calculus of congestion pricing
The political feasibility of using prices to mitigate congestion depends on who receives the toll revenue. We argue that congestion pricing on freeways will have the greatest chance of political success if the revenue is distributed to cities, and particularly to cities through which the freeways pass. In contrast to a number of previous proposals, we argue that cities are stronger claimants for the revenue than either individual drivers or regional authorities. We draw on theory from behavioral economics and political science to explain our proposal, and illustrate it with data from several metropolitan areas. In Los Angeles, where potential congestion toll revenues are estimated to be almost $5 billion a year, distributing toll revenues to cities with freeways could be politically effective and highly progressive.
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2005:8, Örebro University, School of Business.
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- Kockelman, Kara M. & Kalmanje, Sukumar, 2005. "Credit-based congestion pricing: a policy proposal and the public's response," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(7-9), pages 671-690.
- Fiedling, Gordon J. & Klein, Daniel B., 1997. "Hot Lanes: Introducing Congestion-Pricing One Lane at a Time," University of California Transportation Center, Working Papers qt74n0z81q, University of California Transportation Center.
- Molly D. Castelazo & Thomas A. Garrett, 2004. "Light rail: boon or boondoggle?," The Regional Economist, Federal Reserve Bank of St. Louis, issue Jul, pages 12-13.
- Wachs, Martin, 1994. "Will Congestion Pricing Ever Be Adopted?," University of California Transportation Center, Working Papers qt98r1z5rj, University of California Transportation Center.
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